Panasonic Corp said on Thursday it is working to develop a new battery cell for Tesla Inc based on the U.S. electric vehicle maker's new cell format, as the Japanese company moves forward its decade-old partnership with Tesla.

Tesla has increased the range of a few Model 3 variants in Europe after updating the Chinese-made Model 3 with new battery cells from LG. One of the great advantages of electric vehicles is that they improve with advancements in battery technology.

Tesla says the first builds of a more affordable model happened in June, with volume production planned for the second half of 2025. The new car will likely slot below today's Model Y and lean into Tesla's self-driving roadmap.

Fasten your seatbelt, because Tuesday is Tesla's "Battery Day", and some investors expect Chief Executive Elon Musk's pitch on the electric car maker's energy storage advances to re-energize its rally following a recent 21% stock slump.